Online retailers are reaching a crossroads in terms of gauging customer satisfaction, according to a recent study.
Posted Sep 9, 2004
A decade after the birth of e-commerce, online retailers are reaching a crossroads in terms of gauging customer satisfaction, according to a recent study by ForeSee Results and Internet Retailer magazine. The report's respondents say that their biggest challenge is "figuring out the right priorities for [Web-]site development." Ninety-four percent of them said customer satisfaction remains their top priority.
One stumbling block is that retailers seem to be increasing their reliance on anecdotal evidence, especially derived from the contact center: 58 percent of respondents said they used customer-service complaints to determine priorities, a rise of 9 percent over last year. Most retailers, says Paula Rosenblum, director of retail research at Aberdeen Group, "have no other choice but [to use] persistent feedback studies" to gather information on what customers really want. A dominating 72 percent of the study respondents stated that contact-us responses--hardly scientific data--were among the Web-research tools they relied on.
Larry Freed, CEO and president of ForeSee, says that tracking customer activity remains critical, but that "there are definitely [real] tools available." Some companies, he says, "are using customer satisfaction data to make decisions and set priorities, and in some cases to change the recommendations of management."
"The art form of merchandising is [deciding] what's a comparable product [to sell]," Rosenblum says. The ForeSee study's findings, Freed says, shows that simply "tracking eyeballs" is no longer sufficient. He says that "search and navigation [are the two] biggest challenges for retailers today. When you go into a store you see hundreds of square feet of products. On a Web site you've got a 15-inch window onto a limited number of items [and the retailer has] a hundred times the number of SKUs behind that window.... The next big breakthrough is, someone's going to come up with a new way of navigating a site."
Eric Best, founder and CEO of online-marketing firm Mercent, says that merchants' options are improving all the time. He sees "a wide variety of sophistication [in] and leveraging of current technologies in online retailing today."
Best says that "things are becoming more quantitative as data becomes more structured, and analytics become more available." But even as the available technologies have matured somewhat, time has brought some measure of wisdom. "It's overstating it a little to say that retailers have only their guts to go on," Best says. "This is not the same business we saw five years ago, when companies were going online for the first time. Some companies have [as much as] ten years of experience [now]. They can make qualified decisions on actual customer behavior."
For the moment, what tools do exist often require dealing with multiple providers. Best says that "the number of vendors that are focused on online retail analytics is growing--a lot of them are working on optimizing [marketing] results," such as search engine marketing, banner advertising, email marketing, paid inclusion. "There's a different vendor or solution for each one of those channels. You can piece together the solution, but a single platform doesn't [yet] exist today."
Freed, for one, is happy to see the days of "gut instinct" dwindling. After all, he says, a lot of that instinct comes from consultants and industry experts, who "aren't always in touch with the typical consumer.... [That makes] 'gut' a very scary thing."
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